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Retirement News
Retirement Income Market Will Grow Slowly, Says New
Study
Financial planners seek more retirement-income
tools
June 6, 2006 - Financial planners might need to
reconsider their current business model in order to meet the needs of
the growing and diverse aging population, according to a new study
released yesterday by the Financial Planning Association.
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on
Retirement News |
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The majority of financial planners believe that the
retirement income market will grow substantially, but at a slow pace,
according to a new study on financial planners' attitudes and
perceptions about the retirement income distribution market.
The study, 2006 FPA Financial Advisors' Attitudes
and Perceptions about the Retirement Income Distribution Market, was
sponsored by OppenheimerFunds Inc. and produced by the Diversified
Services Group, Inc. (DSG).
"Extended life expectancies, a greater number of
variables to manage, and difficulties in communicating with older
clients, make for a much more protracted and complicated planning and
monitoring process for financial planners," said Bob Vickery of DSG.
"The situation has the potential to grow worse over
the next 10 years as the demand for retirement income and distribution
services continue to increase and compliance requirements are likely to
become even more onerous."
Vickery also said, "These solutions and products
are already an important part of financial planners' portfolio of
services. Driven by consumers and their clients' needs, planners say
that offering retirement income solutions is crucial to the success of
their businesses."
"Regardless of the pace of growth, retirement
continues to evolve into a more and more complex financial planning
issue," said Kathleen Beichert, Senior Vice President of Retirement
Plans at OppenheimerFunds, Inc.
"Our retirement planning tools and services help
financial planners address retirement needs one client at a time."
"FPA is the leader in helping financial planners
succeed and better understand the needs of Americans who are faced with
producing income in retirement. FPA also helps those firms that support
financial planners create and deliver the retirement-income tools and
education needed to serve investors," said Daniel B. Moisand, CFP(R),
president of FPA.
"This study demonstrates our and OppenheimerFunds'
commitment to making sure America doesn't outlive its assets."
Other key findings about serving senior
citizens:
● Systematic withdrawal strategies and
dividend-paying investments are by far the most commonly recommended
retirement income solutions.
● Specific income-generating products such as
annuities and Certificates of Deposits (CDs) are recommended far less
frequently.
● 60 percent of the planners surveyed have
recommended reverse mortgage products at some point, however, only 6
percent recommend them often.
● 75 percent of those surveyed use some type of
retirement income planning software program. Two-thirds of these
programs are modified accumulation programs or were designed by the
planners themselves.
● Respondents typically rely on existing clients
to fuel their retirement income business. It appears that this group
waits for their clients to reach retirement age and/or leverages their
existing relationships for referrals.
"While existing clients and referrals are always a
good way to target this market, there is a real opportunity for planners
to reach out to others who need help with retirement planning," said
Beichert. "Planners should look for ways to partner with financial
services companies and expand their retirement income client base."
The study also contains implications for providers
of products and services to financial planners. "Financial services
companies, financial planners, and technology vendors must develop more
sophisticated planning tools that segment clients and provide them with
credible, justifiable, tailored solution sets that are simple in
concept, but adaptable to a variety of financial needs during the early
and late retirement life stages," added Vickery.
An executive summary of the study will be
distributed to FPA members this summer and the full study will be
available for $3,750 for FPA institutional members in June. In addition,
FPA will publish articles developed around the study's top findings in
its Solutions magazine and other publications.
About
the Financial Planning Association
The
Financial Planning Association connects those who need, support and
deliver financial planning. We believe that everyone is entitled to
objective advice from a competent, ethical financial planner to make
smart financial decisions. FPA members demonstrate and support a
professional commitment to education and a client-centered financial
planning process. For more information on FPA, visit www.fpanet.org.
The
Financial Planning Association is the owner of trademark, service mark
and collective membership mark rights in: FPA, FPA/Logo and FINANCIAL
PLANNING ASSOCIATION. The marks may not be used without written
permission from the Financial Planning Association.
About
OppenheimerFunds, Inc.
OppenheimerFunds, Inc. is one of the nation's largest and most respected
investment management companies. As of March 31, 2006, OppenheimerFunds,
Inc., including subsidiaries and controlled affiliates, managed more
than $200 billion in assets, including mutual funds having more than 6
million shareholder accounts. OppenheimerFunds, Inc. is a member of the
MassMutual Financial Group and is not affiliated with Oppenheimer & Co,
Inc. or Oppenheimer Capital.
About
Diversified Services Group, Inc. (DSG)
DSG is a
multi-disciplined firm that provides consulting, research, information
and sales executive development to the financial services industry. The
DSG Retirement Practice provides counsel on the Retirement Income
Distribution and Assets Management Market and produces the RM2 Report
Series,(TM) on the 'Retirement Management Market.' These reports focus
on issues that firms face as they develop services, products and
marketing initiatives to reach individuals and compete at and after the
Retirement Inflexion Point(TM). For more information about DSG visit:
www.DSG-CandR.com
Source:
Financial Planning Association
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